| Wicky
speaks out for "Made in Sri Lanka"
By Suren Gnanaraj
Ariyaseela Wickramanayake, the combative
head of Mundo Gas and chairman of ship repair and salvage firm Master
Divers, is perhaps one of the few entrepreneurs in the island who
can be called a 'shipping tycoon'. In this interview Wickramanayake,
also known as 'Wicky', outlines his plans to revive Pelwatte Sugar
Industries Ltd., which Master Divers bought in March 2002 through
the Colombo Stock Exchange at a time when sugar production was in
decline and badly in need of investment. He also speaks of his fight
against multinational Shell in the hotly contested gas market, and
his pet project of building a hub port in Hambantota, ideally located
almost astride the East-West trade route across the Indian Ocean.
What
is the current position at Pelwatte Sugar company?
As soon as we made the acquisition in 2002, we had to go in for
crash planting. We planted 5,000 hectares of sugar cane and the
harvest this season is 415,000 tonnes, which is the biggest harvest
since its inception. Last year, we only harvested around 250,000
tonnes. We hope to plant another 5,000 hectares. Much of the land
that is to be used for this plantation belongs to the Pelwatte Sugar
company, which was neglected by the previous management.
What
are the major problems faced by Pelwatte?
No government support. We can't compete with subsidised
sugar imports. Our power charges are 300 percent higher than that
of India. The Indian government provides sugar producers with free
transport, fertiliser subsidies etc, whereas the Sri Lankan government
doesn't even consider sugar as a business. I provide nearly 175,000
people with employment and nearly the entire Moneragala District
lives off this industry, but still we receive no support.
Does
Sri Lanka have the capacity to produce enough sugar to meet its
requirements?
In 1991, India, which has one of the largest populations
in the world, was importing sugar. By 2000, India managed to produce
sugar for its entire population including the areas in which sugarcane
does not grow. At present it also produces an additional 5,000 tonnes,
which is exported to countries such as Sri Lanka. However, we on
the other hand spend Rs 12,500 million on sugar imports every year.
This is a colossal amount, which could easily be diverted to improving
the living conditions of the masses and providing them with employment.
What
type of support do you require from the government?
I do not require any assistance from the government. All
I want is for us to sell a kilo of sugar at Rs. 30 from the current
price of Rs. 28, to avoid suffering losses. We hope to meet nearly
50 percent of the country's consumption needs in a couple of years,
but first we must be able to sell our produce at a reasonable price.
How
have you managed to deal with the threat of wild elephants in the
area?
We have built electric fences around the area, but the
threat of elephants will always be present unless they are re-located.
The government must take this decision now. After all, this industry
is the main source of income and employment for the people living
in that area. In the long term, this industry will also help save
foreign exchange.
Would
you like to comment on your plans to promote dairy farming in the
region?
At present we have given cows free of charge to the farmers
for their daily requirements. I want to get into the dairy industry
at some point with around 25,000 farmers being able to supply us
with two litres of milk a day. At present, however it is not viable
since fresh milk cannot compete with the cheap imported milk powder.
It would be madness if I were to think of setting up now.
So
what are you implying here?
We need to create a culture where people will buy Sri
Lankan products. Bread is our biggest enemy, followed by imported
milk powder.
So
are you saying that even though you want to start dairy farming,
it is not a viable option?
It is foolish to enter the market if people are not willing
to buy your products. But I must say that I'm one of those thick-skinned
fellows who would start anything if I think it is right. I couldn't
care less if the MPs in Parliament can't understand what I am trying
to do and keep laying obstacles in my path. Here I am, selling gas,
fighting with Shell to provide the people with cheaper gas. Do you
know that if the government gives me the necessary support, I can
close Shell down in one year.
What
type of support do you want from the government?
If I'm selling gas cheaper than Shell, then I must be
allowed to do that without any unnecessary interference.
What's
the progress you have made with regard to the subsidiary, Pelwatte
Sugar Distilleries?
By next year, we would be in a position to supply the
country's entire national requirement of alcohol.
Is
the subsidiary making any products?
No. We sell our alcohol to local distilleries. We don't
make any alcohol products because I'm anti-alcohol. My grudge is
that people are still allowed to import alcohol. It's unreasonable,
especially when you already have reached a level of self-sufficiency.
At the moment, production is slow because we depend on sales to
trigger the manufacturing process. At the moment we have 1000 million
litres in our stores, which need to be sold.
Any
expansion plans for Pelwatte?
We want to reach 100 percent self-sufficiency in sugar
in approximately five to six years from now. We intend to expand
our sugar cultivation to meet this target.
With
regard to Mundo Gas, there were several allegations made recently
by the SLPA that you had not provided them with the relevant documentation
relating to insurance and class certificates? Can we see the documents?
I
have submitted all the relevant documents and everything is clear
now.
What
about your port arrears?
Everything has been settled. We are now fully operational.
If everything was not in order, they would never have allowed us
to operate.
There have also been several queries with regard to the safety of
your operations in the Galle harbour. Can you comment?
Not a fly has been killed so far. Everyday you hear of
accidents from kerosene burns, agro chemical poisoning and road
accidents. But to date, there has not been a single gas-related
accident.
So why is the SLPA constantly making these allegations against you?
I don't know. You tell me. These are just baseless allegations.
Can they even prove that a fly has been harmed? Anything can be
dangerous as long as there are accidents, but there hasn't been
a single one so far. Just because Shell says that our operations
are dangerous, surely you can't believe them.
What about the alleged gas leak? Didn't the residents complain of
a smell of gas in the area?
There was no gas leak. I can't understand why these people
are so unpatriotic. Recently an elderly resident lady filed action
against me, retaining several leading President's Counsel to fight
me. Their fees were paid by Shell, so you know who is behind all
of this.
Are you implying that this multi-national is trying to bring you
down?
They are scared of the threat I pose to their business.
How did they suddenly come up with promotions such as giving away
prizes such as washing machines for Shell gas customers? How was
this shrew suddenly tamed? It was after my entrance. This is not
a marketing strategy. They are aware that they cannot compete with
us and so they have resorted to shower people with various goodies.
What type of proof do you have to say that Shell is trying to bring
you down?
There is no need for proof. It's all over the newspapers.
They are trying everything to woo customers. I challenge you to
report that Mundo gas is cheaper than Shell. It is because we are
cheaper that there is such great opposition mounting against us.
The prices of gas is the highest ever in the history of our country.
Unfortunately the Sri Lankan people are not rallying around me in
this fight. I'm very, very sad and disappointed at the attitude
of our Sri Lankan people. This kind of lacklustre attitude is the
reason why the country has not developed.
At the Sunday Times Business Club meeting recently, you were quoted
as saying that gas was not your line of business and that you would
like to get out of it soon. What did you mean by that?
I never said I will just leave. What I meant was that I
am not in this particular industry to make money. I'd rather grow
sugar cane and give farmers cows and begin a more agriculture-based
business. However, I want to see realistic prices setting in as
far as gas is concerned. I'm not here to sell the poor man a gas
cylinder and make a profit out of that. I have never done that in
my life. I was the only guy who had the guts to fight Shell, and
I have succeeded in that. All I'm now asking for is that the international
market price, port charges and freight charges should equal the
selling price of a gas cylinder. There must be a standard port charge
for all the players. Then let the people see who is making large
profits. All I say is, gas can be sold at a cheaper rate. If people
don't like me fighting Shell, I'm not going to be the loser. It's
the consumer. If Shell is allowed to operate in the Colombo harbour,
then I must be allowed to operate in the Galle harbour without any
interference. After all, the supply of gas is equally dangerous
in Colombo as it is in Galle.
I believe people are still a bit circumspect about how you are able
to provide gas at a much cheaper rate than the other players. What
are your thoughts on this?
Why should I come and invest my money and then suffer a
loss by providing cheaper gas? The truth is I'm not giving gas free.
The price I levy is the real price of gas. That's what I'm trying
to say. Some one is making a lot of money out of this business.
I'm a man who has been in the industry, a veteran entrepreneur and
a senior citizen of this country. I'm no joker! The question I need
an answer to is, if I can pay the same price for oil, port charges
and freight charges as Shell, and still sell my cylinder 100 rupees
cheaper, why can't they do the same? How did the cost of a domestic
cylinder decrease from Rs.3,500 to Rs.1,400? It's after the arrival
of Mundo.
Master Divers anounced in 2002 that it was preparing to expand its
bunkering operations to Hambantota. What is the progress that has
been made so far?
We signed an agreement with fuel suppliers Bakri, a Saudi
Arabian oil company, which would be our supplying partners for bunkering
operations, which are set to begin off the Hambantota shores in
a few weeks. We have invested close to US $25 million in the project
and we bought a 40,000 tonne vessel called "Sea Storage"
for our operations. Master Divers also provides bunkering services
in the Colombo port, but on a relatively smaller scale.
You had plans to develop the Hambantota port? What type of progress
have you made so far?
A Canadian agency has just completed a feasibility study
on the project. The UNF government has highlighted this project
in its manifesto, and the BOI has tagged it as a priority project.
So hopefully we can start looking for investors to get the project
underway soon. We hope to see the project completed in another 4-5
years. I hope to get involved and make this port one of the best
in the world and even out do Singapore. The Colombo port is just
too small.
Do you think the hardest days are now behind you?
All I have to say is that I'm trying to sell gas at a cheaper
rate, so give me all the encouragement, support and a fair chance
to do so. I would also like to urge that people change their attitude
towards Sri Lankan products. After all, none of the developed countries
imports food. We must strive to be agriculturally self-sufficient
and buy Sri Lankan products. That's the best way to develop our
nation and our economy.
- Bread is our biggest enemy, followed by imported milk powder.
- All I want is for us to sell a kilo of sugar at Rs. 30 from
the current price of Rs. 28, to avoid suffering losses.
- I'm one of those thick-skinned fellows who would start anything
if I think it is right.
I couldn't care less if the MPs in Parliament can't understand
what I am trying to do and keep laying obstacles in my path.
- If the government gives me the necessary support, I can close
Shell down in one year.
- I'm not giving gas free. The price I levy is the real price
of gas. I'm a man who has been in the industry, a veteran entrepreneur
and a senior citizen of this country. I'm no joker!
- I'm very, very sad and disappointed at the attitude of our Sri
Lankan people. This kind of lacklustre attitude is the reason
why the country has not developed.
- The threat of elephants will always be present (at Pelwatte)
unless they are re-located. The government must take this decision
now.
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